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Veterans: The Few, the Proud, the Scammed

Photo Credit: iStock/Anchiy

This Veterans Day, there’s more reason to celebrate those who have served and sacrificed.

In Illinois, Attorney General Lisa Madigan recently sued two companies accused of bilking hundreds of older veterans into buying high-commission annuities and other often unwise retirement investments. In New Jersey, authorities busted those behind a $24 million “bait-and-switch” scam that swindled thousands of college degree-seeking veterans out of their G.I. Bill tuition benefits. And across the country, federal authorities are now investigating what they consider to be predatory lenders believed to pressure veterans and active military personnel into unneeded and costly mortgage refinances.

Despite these important steps, the road ahead remains rough for veterans. Because of their post-service benefits, they are among those most often targeted for scams — along with appreciative civilians who are thankful for their service. Among the leading (and ongoing) veteran-themed scams:

Phishing fraudsters. Especially preying on older vets, telephoning tricksters pose as employees of the Department of Veterans Affairs and try to glean personal or financial information, including credit card and bank account numbers. Fraudsters “spoof” phone numbers so the caller ID seems authentic, then they claim there are new VA policies regarding pensions, prescription drugs or medical benefits. Most recently, scammers have been posing as callers from the Veterans Choice Program, which allows vets to receive health care within their community. When making calls, they typically tweak the area code of the legitimate VCP phone number (866-606-8198); they also operate fraudulent hotlines with similar phone numbers to receive calls.

What to know: Like other federal agencies, the VA uses U.S. mail — not phone calls — to share information, and it doesn’t request vets’ personal information already on file. When in doubt about supposedly new benefit policies, call the official VA toll-free phone numbers.

Bilking benefits. The lawsuit by Illinois AG Madigan is an example of a common scam — steering older vets into an irrevocable trust or other unsuitable investments on a usually bogus “guarantee” they can be eligible for additional benefits. Other schemes promise lump-sum payouts for veterans’ pensions and future benefits that pay only a fraction of their actual worth, or charge hefty fees for services like filing claims or getting military records that could boost the risk of identity theft in sharing sensitive information.

What to know: The usual pitch in the “more benefits” claim is by transferring existing funds to self-described “veterans advocates” (in truth, typically unscrupulous financial advisers), retirees can appear as impoverished and qualify for Aid and Attendance (A&A), a Veterans Affairs program that pays an additional benefit to low-income veterans 65 and older. But eligibility for A&A is specific and strict. In addition to low income, requirements include needing aid and attendance from another person for everyday tasks, being bedridden, legally blind or living in a nursing home. Plus, new trust recommendations usually involve purchasing annuities, long-term investments considered inappropriate for many older retirees but generating high commissions for brokers.

Charity cons. Fraudulent fund-raising purported to help disabled vets is among the top charity scams — especially when targeting well-meaning older donors. (Other hot-button hoaxes include those that allegedly help disaster victims, sick children, and police and firefighters.) And these scams tend to increase from Veterans Day through the holidays.

What to know: To elicit funds, scammers often use sound-alike names of recognized organizations, if not pretending to represent them. Be especially suspicious of unsolicited pitches by phone or email; they’re more likely to be bogus than solicitations sent by U.S. mail. Before donating, verify charities by checking their names and reputations at the Wise Giving Alliance, Charity Navigator or CharityWatch. In general, better-rated charities spend at least 75 percent of incoming donations on program activities.

Romance rip-offs. Sweetheart scammers frequently pose as military personnel (especially officers) currently deployed overseas, an especially effective role in snagging the most pursued and prized target: American women over 40, usually divorced, widowed or disabled, who are looking for love or companionship online. After some cyber schmoozing, these self-described “military” suitors inevitably ask for money, usually claiming a paycheck problem, medical emergency or the desire for a plane ticket home to meet the target. Once the money is sent, victims typically never again hear from the cyber scammers, or are bombarded with additional money requests.

What to know: Notice the bad grammar and frequent misspellings? That’s because romance scammers tend to be foreigners, and their prose is certainly not what you’d expect from an officer. Vague and repetitive email responses could indicate you’ve been hooked by an organized crime ring, and one scammer picks up where a cohort left off. So don’t reveal your last name, address, workplace or other personal information until you’ve met and verified a legit online match; if you talk by phone, turn off your phone’s location settings. And don’t send money: Bona fide military personnel on dating websites get regular paychecks and have access to health care and travel.

For information about other scams, sign up for the Fraud Watch Network. You’ll receive free email alerts with tips and resources to help you spot and avoid identity theft and fraud. Keep tabs on scams and law enforcement alerts in your area with our Scam-Tracking Map.

Also of Interest

  • How to avoid the ‘resort fee’ rip-offs
  • Expect more scams this Medicare open enrollment
  • Get help: Find out if you’re eligible for public benefits with Benefits QuickLINK
  • Join AARP: Savings, resources and news for your well-being

See the AARP home page for deals, savings tips, trivia

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